The “punitive personal costs” sought against Public Protector Busisiwe Mkhwebane over her legal defence of the Bankorp-CIEX report would set a bad precedent for her office, Mkhwebane’s lawyers told the Constitutional Court on Tuesday.

Mkhwebane is fighting a February 2018 High Court order which ruled that she was personally liable for part of the legal costs incurred by the SA Reserve Bank in the Bankorp matter.

The Public Protector, in 2017, had said that Absa must repay R1.125bn for a “lifeboat” provided to Bankorp by the SA Reserve Bank during the apartheid era. Bankorp was acquired by Absa in 1992.
The central bank and Absa both went to court to have the report and its findings set aside.

In his submission before the Constitutional Court on Tuesday, Mkhwebane’s attorney Vuyani Ngalwana asked if it was reasonable to have the office of the Public Protector slapped with “punitive costs” while carrying out its functions.

“Can the country afford to have a head of a Chapter 9 institution operating under a threat of punitive legal costs ... is it reasonable, is it appropriate, is it desirable,” he asked.

Ngalwana further argued that the order that the Public Protector personally pay 15% of the central bank’s legal costs could set a negative precedent, and dismissed allegations that Mkhwebane acted unreasonably.

Kate Hofmeyr, on behalf of the Reserve Bank, said the Public Protector “did not act in a manner that is becoming of the high office she occupies”.

Hofmeyr argued the Public Protector had “secret meetings” with the Presidency during the investigation and did not disclose those interactions in her report. “We submit that the costs be paid by the Public Protector personally,” she said.

Mkhwebane’s 2017 report, which separately recommended a review of the Reserve Bank mandate, caused market jitters with a R1.3-billion sell-off in government bonds, according to Hofmeyr’s submission.